June 1, 2019
Yet again, we come across another FINRA regulatory matter involving the alleged misconduct of a registered representative during his transition from his former employer. No . . . it's not a sympathetic case for the Respondent rep, as our publisher Bill Singer makes clear. In light of the recurring nature of these battles over who "owns the customer," Bill takes the opportunity to chastise FINRA for sitting in the stands eating cotton candy rather than blowing the whistle as an impartial referee.
May 30 was originally chosen as Decoration Day because it was supposedly the only day in the Spring calendar that wasn't already commemorating a major Civil War battle. That war was so thick with battles one can well question the premise. Still, General John Logan chose to honor the Fallen on the one day when, at least by his lights, the guns fell silent. He chose a solitary day of peace, a day when no one died in combat, the only kind of day on which a private life can thrive, and I think he chose well. We lost something sacred when we made Memorial Day a mere seasonal three-day weekend.
In a recent FINRA expungement case, the sole arbitrator recommended expungement of two customer complaints. In the first occurrence, employer Morgan Stanley had denied the customer's claim and no litigation or settlement ensued. In the second occurrence, the stockbroker was not named as a Respondent in the customer's arbitration against Morgan Stanley. Unfortunately, in recommending expungement, the FINRA arbitrator unwittingly opens up a can of worms.
There is nothing more frustrating than being wrongly named in something but the bureaucracy doesn't care. Rules is rules and procedures is procedures. Ya gotta fill out the Form 1243-C52A/BII.A(iv) and come downtown to file an appeal. You wait on the line at the green light for an hour, but just as you get to the window, the clerk closes it for lunch. You wait on the line at the yellow light (which is blown out) and you tell your tale of mistaken identity to a listener who is rolling his eyes and not particularly interested. That elicits a "buddy, either pay the $100 fine or go over to the line at the red light and tell the supervisor." After waiting on a third line for another hour, the supervisor agrees with you, doesn't know why the clerk at the green light didn't resolve the error, not sure why you were on the yellow-light-line and tells you that the problem is fixed. Two weeks later you get a notice that you failed to appear as required and the $100 fine is now $1,000. In a recent FINRA expungement case, we don't have the same set of facts but we sure as hell have what looks like a case of mistaken identity and the old bureaucratic runaround from FINRA.